PROTECTION v. FREE TRADE.

Press, Volume LVII, Issue 17227, 18 August 1921, Page 8

PROTECTION v. FREE TRADE.

TO TH* EDITOR 09 "THI m»a." Sir, —Having read all your correspondence on this high y (ontrovcrsial subject with interest, permit me tomake some remarks. At the outset, I'am neither a prophet nor the seventh son of a seventh son, yet I always mistrust a man who is. cock-sure about the past, certain of the futtirv, or overwise anent tli6 present. Prognonti nations such as some of your correspondents «p«k, were t(.o much like placing a mnn in the vortex of chaos and asking him to pr. diet what will happen next. Our business interests in this young country can easily adapt themselves to a higher tariff and prosper, if assured that the condition will bo permanent; but when it nannot be known how soon changes will occur, nor how radical they may b-, capital always plays a waiting gamo and labour starves. Pncertainty is the deadliest foe of industry. That, moro than all else, is responsible for the present proloiwed business depression. My attitude towards protection would argue that the power of producing wealth is infinitely moro important than wealth itself; it ensures not only the possession and the increns.* of what has been gained, but also the replacement of what has been lost. The prosperity o? a nation is not, as you believe, sir, greater in the proportion in which it has amassed more,wealth (i.e., valuer of exchange), but in the proportion in •which it has moro developed its poweis of production. Adam Smith in the Wealth of Notions (the greatest Free trader who ever lived), admitted exreo-tions to tree trade, to Friedrich List (the greatest authority of all time on protection, who founded thus policy In Germany and America), (admitted exceptions to protection. And in both authors the exceptions in theory important ti-at cne divergence on bnlance is not nearly so great as the reafler might -suppose. In ray opinion th re is no real opposition between free trade and pr-tect on because neither is an end in itself, out simply a means to achieve a certain end, namely, the greatest development of productive power. Which policy may be better at any time depends on the stage of development of the nation in relation to the development of cither nations. For the time being a protective doty involves a loss; But the present loss 1b justifiable if in the future there will be n greater _ gain. It,is true that protective duties at first increase the price of munu&ctured goods, but it is fust as ttuo.Smd moreover, acknowledged by the prevailing economical school, that in the course of time, by the nation being enabled to bulla up a comolete'ly • devefo-ed mrnufactu xd power of- its own, those goods arc produced more cheaply, at h me -han the price at which they con be imported from foreign parts. .If, therefore, a

sacrifice of value * oansed-by protectiro duties, it is made good by the K nra of a Dower of production,- which not en y Secures to the nation .an infinitely ££er amount of material goods, but SmT industrial independence in case of wan A nation which only carnes on agriculture, is an individual who in his material production lacks one arm. Commerce is -merely the medium ot excCge teMveen the agricultural and the manufacturing power, and betwren their separate branches A nation which exchanges agricultural products for foreign manufactured goods is an individual with one _ arm, which is supported by a foroign arm. lhia support may be useful to it hit not so useful as if it possessed two arms itself, and this because its activity U dependent on the caprice of the foreigner In possession of a manufacturing power ot its own, it can produce as mui-li provisions and raw materials as t!-e home manufacturers enn consume; 1 ut if depeudent upon foreign manufacturers it can merely produce as much surplus as foreign nations do not care to produce for themselves, and which they are obliged to buy from another country. I think free traders will not cenv that the internal market of a nation u ten times more important to it than its external one, even when the latter is in the most flourishing condition but they often omit to draw from this' the conclusion, which is very obvious, thnt it is ten times more important to cultivate and secure the home market, thart to seek wealth abroad. In short, history and statistics alike prove the correctness of the dictum that nations are richer and more powerful the more they export manufactured goods and import the means of subsistence, and raw materials. In fact it may be proved that entire nations have boon ruined merely because they have exported only means of subsistence and raw materials, and have imported manufactured goods. A great future is approaching New Zealand for manufactures, commerce and navigation, which »vill surpass the present age, jusj; as the present surpasses the past. Let us only have the courage to believe in a _ great national future, ».nd _ in that belief to march ■ onward. But above .ill things we m-ib-t liavo enough national spirit at onco to plant and protect the tree, which will vieid its first richest fruits only to future generations. We must first gain possession of the home market lor our own ration, at least as respects articles of general necessity, and try to procure the products of other countries whioh allow us to pny for them with «rr own manufactured goods.—Yours, etc, JOSEPH HAMLET. August 17th.